Islington council has issued a legal notice requiring protesters at Finsbury Square to leave within a week or face court action. Photograph: HeardinLondon/Demotix/Corbis

The last remaining outpost of the Occupy tented protests that sprang up in London last October faces eviction, it was announced on Friday, just as a new wave of action was planned around the world.

A week after the main Occupy London camp was established outside St Paul's cathedral in mid-October, a group of activists marched to Finsbury Square, a small green space to the east surrounded by office buildings. Initially set up as a spillover camp after the area around St Paul's became too crowded, the Finsbury Square site was later rebranded as an "eco village", showcasing sustainable technologies.

While the St Paul's site and other Occupy offshoots in unused office buildings around the City were evicted, in the case of the main camp in mid-February, Islington council, which owns Finsbury Square, opted to leave that camp alone.

But on Friday, a council spokeswoman said Islington issued a legal notice requiring those remaining at the square to leave within a week or face court action.

Paul Convery, the Islington councillor responsible for community safety, said: "The council has said from the outset that we support the right to peaceful protest, and we have tolerated Occupy's presence at Finsbury Square since October.

"However, it is now apparent that the character of the protest has changed and Occupy's presence is significantly diminished. In the protesters' place, we now see a group of vulnerable and homeless people who would be better cared for elsewhere.

"At the same time, residents and businesses in and around Finsbury Square are being significantly inconvenienced by the continuing camp and we have had complaints about alcohol and drug use on site, noise, harassment, and damage to property. The extent of damage at the site means Islington council now faces a substantial bill for repair and clean up.

"We wish to see the protest end through a negotiated settlement but, with our community suffering, the time has come for us to begin legal proceedings to remove the camp and return Finsbury Square to community use."

The phenomenon of activists being gradually replaced by vulnerable homeless people, a number with drink, drug or other mental health problems, was also seen at St Paul's in the run-up to the eviction, with some protesters warning they spent much of their time acting as de facto social workers to some of the arrivals.

News of the planned eviction comes a day before the movement attempts to reinvigorate itself with a fresh round of action planned in dozens of cities around the world. In London, activists will gather at 1pm on Saturday outside St Paul's for as-yet-unspecified protests expected to target banks or other elements of the financial system. Those taking part have been warned to bring a tent.

Ahead of the protests, the movement has issued a draft manifesto, drawn up by activists based around the world, which calls for a series of measures to improve economic equality and social justice.